KonaWare Seeks Arkansas IT Cluster

Arkansas economy and technology advocates talk about drawing knowledge-based jobs to the state and keeping them here. One way to do that, those advocates say, is through “clustering” various industry-related companies with similar technologies in one area, much like the “Silicon Valley” in California.

KonaWare Inc. of Menlo Park, Calif., is on board with that philosophy. Two principals at the company teamed up with Tim McFarland of Accelerate Arkansas (one of the advocates) and wrote a paper titled “Logistics Technology Center of Excellence: Why Northwest Arkansas is Uniquely Positioned to Become a World-Class Focal Point for Logistics Technologies.”

But KonaWare, an information technology and software company focused on logistics and freight tracking, has done more than that. In August, principals opened an office in Harrison, and they’ve hired Jeff Amerine as vice president of transportation. Amerine was previously the managing director of information technology for Fed Ex Freight East in Harrison.

Accelerate Arkansas is a group of volunteers working under the Capital Resource Corporation, a non-profit organization and member of the Arkansas Capital Corporation Group.

Amerine, and his chairman and CEO, Jim DiSanto, who offices in Menlo Park, believe they are on the tip of a wave of a logistics and transportation cluster in Northwest Arkansas. But the cluster, they say, will be more than trucks and drivers; it will involve information technology.

“Considering the significance of the major players in the region and the demand they alone generate for logistics technology solutions, one could reasonably project doubling the logistics focused technologists headcount over the next five years to over 15,000,” they wrote.

They point to the relatively low cost of living in the area, and the concentration of retail and foodservice industries, both of which require transportation.

“Such an environment creates competition amongst employers vying for top talent, and it pushes the talent to maintain honed skills and entrepreneurial attitudes that ultimately create the fire and desire to start new ventures,” they wrote.

Of course, DiSanto’s aim is also to gain all the business he can from companies in Arkansas — he’d love to make a pitch to Wal-Mart Stores Inc. for instance — but he believes helping grow a technology-related cluster can help everyone.

KonaWare develops supply-chain tracking software for wireless hardware used in the transportation industry.

Amerine compared it to wireless tracking software that Fed Ex or United Parcel Service might use, but for companies that are too small to develop it on their own. KonaWare will customize its suites to support its clients’ existing hardware.

The company’s engineers are developing new applications for personal digital assistants and cell phones that support hours of service compliance, RFID technology, and other productivity tools.

DiSanto said KonaWare is on track to make between $3 million and $4 million in revenue in 2006, but he’s still raising venture capital, which is part of the reason for the cluster paper.

On Dec. 14, the company closed on an acquisition of BITS Inc. of Lewiston, Mo. BITS is an IT consultancy firm.

In February, the company entered into an agreement with IntelliMark Inc. of Little Rock “to pursue the use of handheld RFID interrogators for supply chain applications.”